West Virginia did issue a statement on the matter:
"While Jonathan Kimble's actions broke no laws or regulations, the University has discussed this with him and he agrees that it would be appropriate to forego using the musket in this way in the future. There are some provisions regarding the gun, but none that prohibit its use outside of University-sponsored functions or for hunting purposes. It is also worth noting that powder is used when the musket is discharged at public functions."

As noted in the article, the musket is school-issued. IMHO, It's not to silly of a rule to say "Nothing but powder ever goes into that barrel." Yeah, it's an extremely remote possibility that the rifle discharges a shot at a school function (or is involved in a crime or a hunting accident) but why even risk it? Tradition, blah. There are other guns to hunt with.

I have relatives in Upper Michigan for whom it's a rite of passage to be the one who sits on the hood of the truck, scouting, as they drive through the woods looking for a bear to shoot. I presume they're scouting, not being offered as bear bait.